With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. This US Dollar report looks at the factors that are likely to affect exchange rates over the coming weeks. We have shown the difference in USD you would have achieved when buying £200,000 during the high and low points yesterday.

Currency Pair% ChangeDifference on £200,000

Dollar strengthens despite a lack of job creation

The number of Americans signing on for unemployment benefits slightly increased this week, up to 241,000 from 238,000 the week previous.

All economic releases are being watched at the minute following the Federal Reserve’s decision to raise interest rates from 1.00% to 1.25% as the markets now digest information to try and work out if the Fed will continue to raise interest rates this year. The initial jobless data was only marginally worse than expected and therefore kept the possibility of raising interest rates in the near future alive and as a result the USD was unharmed.

Additionally, the USD was also boosted yesterday following the news that oil prices continued to slip. Yesterday morning, Brent crude prices fell below $45 per barrel, close to a 7 month low and sparked fears the OPEC deal wasn’t living up to its expectations. Many traders would have sold of oil and bought gold amidst these fears due to its safe haven status and its ability to retain its value. As gold is priced in dollars the greenback benefited.

Today’s data releases – can the FED raise interest rates?

Today has the ability to provide more scope into whether the US will raise interest rates further when latest set of manufacturing data is released. If this release is above and beyond expectation I wouldn’t be surprised to see USD strengthen. I think it’s more a question of damage limitation for any clients buying dollars with pounds if this data is positive and the US can warrant more interest rate hikes. Domestically the only solace from the UK would be speculation surrounding our own interest rate hike, which at the minute is still in limbo.

For more information on how future data releases could affect your USD requirement, call our trading floor on 01494 725 353 or email me here.


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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.